KenGen plans upgrade of hydro power plants ahead of new deal
Sondu- Miriu hydroelectric power plant in Nyakach Constituency in Kisumu on February 14, 2018. It's one of the nine plants set for rehabilitation by KenGen.
Kenya Electricity Generating Company (KenGen) plans to increase the capacity of its major hydropower plants from the current 825.69 megawatts, (MW) ahead of negotiation of a new power purchase agreement (PPA) with Kenya Power.
The firm has opened a search for a consultant to carry out a feasibility study on nine of the 13 hydro-power plants constructed between 1954 and 2012.
KenGen will use the study to look for funds to rehabilitate the plants and boost their capacity and in deciding the pricing of a new PPA with Kenya Power.
The firm's major hydropower plants, covered under a 20-year PPA with Kenya Power expiring in June 2028, are key to the country’s electricity supply and the firm wants to boost their capacities given the rising peak load demand.
The nine plants set for rehabilitation include Tana, Masinga, Kamburu, Gitaru, Kindaruma, Kiambere, Sondu Miriu, Sangoro, and Turkwel.
The nine have a combined installed capacity of 810.2MW and are deemed key in providing base load power and ensuring grid stability.
“With rising peak load demands and the increasing integration of intermittent renewable sources, KenGen plans to undertake a comprehensive feasibility study to assess the technical, economic, and financial viability of rehabilitating its major hydropower plants. This will facilitate the negotiation of a new PPA to extend the operational lifespan of these facilities,” says KenGen in a tender dated November 26.
The 10-month study will, among other things, determine the rehabilitation costs and implications of integrating the costs into a new hydro PPA framework.
The consultant will conduct a detailed financial and economic assessment of the proposed new PPA, which will include “devising a PPA tariff structure to meet the revenue requirements” for all power plants involved.
The new PPA will factor in elements such as the main regulatory changes, rehabilitation costs, factoring in how the assumptions in the current PPA compares with the actual performance.
KenGen says it will use the findings of the feasibility study to search for financing from international financing institutions including African Development Bank, World Bank, KfW, AFD and to initiate PPA negotiations with Kenya Power.
The Nairobi Securities Exchange-listed firm is the top electric power producer in Kenya, accounting for 1,726.19 MW or 62 percent of the total electric power supplied to the national grid. This comprises hydropower (825.69 MW), geothermal (755 MW), thermal (120 MW), and wind (25.5 MW). The hydropower comes from nine major hydropower plants and four small plants.
KenGen’s previous rehabilitations have shown promise of increasing the capacity. For instance the 2007 rehabilitation on the 70-year old Tana plant increased the capacity to 20MW from 14.4MW while the 2011 upgrade on Kiambere boosted the capacity to 168MW from 144.
A similar process on Kindaruma in 2012 raised the capacity to 72MW from 44MW.
